Russia is the world's third-largest oil producer, with only about 300,000 barrels per day of spare capacity. It also has substantial spare capacity in piped gas to Europe, though tapping it after the Ukraine invasion would require the EU to roll back sanctions and restart pipelines.
The Kremlin has lobbied hard for China to back Power of Siberia 2, a 2,600km gas pipeline that could more than double Russia's gas exports to China. The two governments signed a memorandum of understanding, but negotiations on price, volume commitments and take-or-pay terms have stalled as China has played hardball. The closure of the Strait of Hormuz in 2026 may have pushed China to offer a slightly better price, given its vulnerability to maritime chokepoints: China's gas stockpiles cover only 40 days, compared with nearly four months of crude reserves (1.3bn barrels).
Russia's GDP fell by 1.4% in 2022 after the full-scale invasion of Ukraine, far less than the 15% contraction economists had predicted. It then expanded by 4.1% in 2023 and 4.3% in 2024, driven by a fiscal splurge, high commodity prices and the militarisation of the economy. By mid-2024 real spending on fixed capital was 23% higher than in late 2021.
The economy has undergone what the central bank calls a "structural transformation": having previously faced towards the West and accepted private enterprise (within limits), it has since 2022 become a war economy that faces the East, with new supply chains enabling more trade with China and India and more production at home. Transactions with the EU had made up 37% of all Russian trade before Vladimir Putin's pivot to China; the EU's foreign direct-investment stock in Russia was €311bn ($346bn) in 2019, while Russia's FDI stock in the EU was €136bn.
Total trade between Russia and China increased by 66% from 2021 to 2024, to $245bn. China accounted for 34% of Russia's total trade in 2024. Energy exports—oil, gas and other commodities—account for 80% of total Russian shipments to China. Western sanctions have left Russia with few alternative buyers for its raw materials and no real alternative supplier for the imported consumer goods, cars and technology it needs. In 2023 the Chinese yuan overtook the dollar to become the most popular currency traded on the Moscow Exchange. Most Russian trade with China is now settled in yuan. Russia's central bank said it had no real alternative to the yuan for its reserves, making them vulnerable to losses if relations with China worsen. Cumulative direct Chinese investments in Russia reached just $18bn in 2024—equivalent to 1% of GDP. As Re-Russia, a Vienna-based analysis firm, notes, "the model of China's economic interaction with Russia looks much more colonial than the Russian-European partnership before the war."
The central bank targets inflation of 4% year on year. Inflation exceeded 10% in early 2025, fuelled by military spending and a shortage of labour caused by conscription and the emigration of skilled workers. Nominal wages rose by 18% in 2024. In response the central bank raised its benchmark interest rate to 21%, the highest since the early 2000s. In 2025 growth slowed sharply, to perhaps 0.6-1%, yet unemployment remained extremely low at 2%, largely because Russia's war machine had sucked up manpower and hundreds of thousands of Russians had fled the country. Consumer confidence remained near an all-time high, according to Levada, an independent pollster. By late 2025 Putin's initial war boom had given way to stagflation: growth at almost zero, labour shortages, hidden bad debts, inflation of 8% and interest rates of 16.5%. Over the past year oil and gas revenues have fallen by 22%. The budget deficit is nearing 3% of GDP—modest by European standards, but Russia receives little foreign investment and cannot borrow on international markets. The Kremlin spends half its budget on the armed forces, the military-industrial complex, domestic security and debt service. Higher taxes further burden the civilian economy, already suffering from double-digit interest rates and labour shortages. Tank factories work overtime while car producers cut shifts.
Russia's economy contracted in the first two months of 2026. The central-bank interest rate stood at 14.5%, nearly three times the pre-war level. The Iran war boosted prices for Russia's oil and gas exports, but Ukrainian strikes on refineries limited its ability to take advantage. On April 17th 2026 the minister of economic development said Russia had "largely exhausted" the resources, such as untapped labour, which it used to cope with macroeconomic problems earlier in the war.
The economy has bifurcated into two distinct metabolic systems. Military and military-adjacent industries receive priority access to labour, capital and imports; cities like Izhevsk, home to the Kalashnikov Group, are booming, with rising property prices and new restaurants. The civilian economy shows signs of malaise. The number of new businesses registered in 2025 was the lowest in 14 years, fully 20% lower than in 2024. Wage arrears doubled over the past year to 2.2bn roubles ($29m), much of them in construction. Samolet, a giant property developer, is struggling to service its debt and has asked the government for a rescue. Avtovaz, Russia's biggest carmaker, is operating its factories only four days a week. A big rise in corporate tax in 2025 and double-digit interest rates weigh on the private sector.
Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Centre, describes the economy as being in "negative equilibrium": holding itself together while steadily destroying its own future capacity. She argues it now runs on "military rent"—budget transfers to defence enterprises that generate wages and economic activity—rather than genuine wealth creation. Unlike the oil windfalls of the 2000s, which came from outside the system, military rent is internal redistribution towards assets designed for destruction. The defence sector accounts for 8% of GDP. Interest payments on government debt in 2026 are expected to exceed spending on education and health care combined. Demobilising without crisis would require security guarantees, mass retraining, sanctions relief, defence-procurement reform and a healthy ecosystem of smaller firms capable of absorbing reallocated resources—all simultaneously.
Oil-and-gas tax revenue fell by around 17% year on year in March 2025 as global oil prices declined amid Donald Trump's trade war. The finance ministry increased the budget-deficit estimate for 2025 to 1.7% of GDP from 0.5% after reducing its forecast for energy revenues by 24%. By mid-2025 the budget deficit had already overshot its annual target, driven by a 20% increase in public expenditure. At least 5% of all government spending was going to maintain a contract army fighting mostly in Ukraine, according to Re:Russia, a Vienna-based think-tank.
The Kremlin has dangled a $12trn package of deals before Donald Trump's administration in return for sanctions relief—a figure equivalent to six times Russia's annual economic output. Kirill Dmitriev, who runs a Russian state fund, has led the effort, meeting Steve Witkoff at least nine times since April 2025. America has been offered deals for Arctic oil and gas, rare-earth mines, a nuclear-powered data centre and a tunnel under the Bering Strait.
Before 2022, Western firms that did business in Russia were largely European rather than American. The Kyiv School of Economics estimates that 324 American companies remain operating in Russia; more than 1,500 Western firms left, many selling their Russian assets at steep discounts to local partners. Some sales contracts gave Western firms the option to repurchase assets after the war; those assets were last valued at a total of just $60bn.
Russia's far north is thought to harbour 29m tonnes of rare earths, equivalent to 74 years of global output. To exploit them, Russia is developing the Angara-Yenisei Valley, a $9bn Siberian processing hub overseen by Sergei Shoigu, who runs Russia's Security Council. Russia hopes to lift its share of global rare-earth mining from 1.3% to 10% by 2030. West Siberia may have 12bn barrels of recoverable shale oil and gas; Arctic Russia, with enough investment and oil near $100 a barrel, might yield nearly 50bn exploitable barrels starting in the 2030s.
Practical obstacles abound. Western countries have imposed nearly 23,000 sanctions. Most surveys of the Arctic's mineral wealth date back to Soviet times. China already supplies 62% of Russia's goods imports, up from 25% before the war. Russia is also flooded with "parallel" imports of Western goods, illegally resold from the Gulf or China. An oil "superglut" may depress global crude to near $55 a barrel. China, which has a near-monopoly on rare-earth mining and processing, has proved reluctant to share its know-how with Russia.
When Putin put the economy on a war footing, 1,300 Russian schools still had no indoor toilets.
Since 2000 the number of rural schools in Russia has fallen from 45,000 to about 21,000. As schools have disappeared, so have the settlements they served. In 2025 the Kremlin scrapped the system of local self-governance, centralising decisions that had previously been made by villagers themselves. District officials have begun openly blaming the war in Ukraine for cuts to rural services, redirecting money from welfare to warfare.
Belgorod is a city of formerly 400,000 people some 40km from the Ukrainian border. Its population has declined since the start of the war. In the border village of Kozinka, less than a kilometre from Ukraine, the authorities shut down the settlement; fewer than ten of the thousand or so residents remained as of January 2026. Many in the border region speak Surzhyk, a dialect blending Russian and Ukrainian, and have friends and relatives on the other side. Ukrainian strikes on Belgorod's thermal power plant in early 2026 brought the region to the verge of a blackout. Governor Vyacheslav Gladkov warned the city could be evacuated if power was lost, and announced a fight against "internal enemies" and those who "sow discontent". In a reader survey by Fonar, a local news website, only 6% of respondents said they gave aid to participants in Russia's "special military operation".
A wave of asset seizures has gathered strength as the war has dragged on. It started with foreign firms that left Russia at the start of the war; their assets were quickly seized and redistributed. The Russian operations of Danone, a French yogurt maker, were sold for a song to a nephew of Ramzan Kadyrov, a militia leader and Kremlin crony. The asset grab soon expanded to Russian businesses. Moscow's Domodedovo airport, once valued at $5bn, was confiscated from its owner and sold at auction for less than $1bn to a subsidiary of Sheremetyevo airport, linked to Arkady Rotenberg, one of Putin's cronies. Vadim Moshkovich, one of Russia's richest men and owner of Rusagro, an agricultural conglomerate, was jailed for fraud after court rulings forced him to redomicile the firm from Cyprus to Russia; the company is being eyed by an entity headed by Dmitry Patrushev, the minister of agriculture and son of Nikolai Patrushev, a former intelligence chief.
In the 2010s Russian prosecutors filed no more than one expropriation petition a year. Since the start of the war more than 500 firms have been expropriated, most of them Russian-owned, including hotels, shopping centres, pasta factories and distilleries. Igor Krasnov, the prosecutor-general, boasted to Putin that he had recovered 2.4trn roubles "for the benefit of the state"; a few months later he was appointed chief justice of Russia's Supreme Court.
On November 7th 2025 the EU announced that Russians would no longer be granted multiple-entry Schengen visas. Over 500,000 Russians were granted Schengen-zone visas in 2024, down by 90% from 2019. The ostensible cause was security—drones, cable-cutting, cyber-attacks and other grey-zone aggression—but the driving force was moral outrage at Russian citizens travelling freely in Europe while Russia's army rains missiles on Ukraine. Exemptions are made for relatives of EU citizens and dissidents who can prove their "integrity". Yulia Navalnaya opposed the measure, arguing it would isolate Russia from Europe in exactly the way Putin has in mind.
The EU has implemented at least 18 packages of sanctions against Russia; a 19th was proposed in September 2025. America has targeted more than 5,000 individuals and entities. A vibrant transshipment industry moves goods from the West to Russia via non-aligned countries, making sanctions difficult to police. In some cases Russia has switched to bartering with trading partners—wheat for cars, for instance—to avoid transfers of money.
On November 21st 2025 America imposed its most potent sanctions since 2022, targeting Lukoil and Rosneft, Russia's biggest oil firms, which together account for half of its crude exports. The sanctions threaten to cut off from American finance anyone, even foreigners, who facilitates sales by the two giants. India, the main purchaser of Russian crude along with China, initially cut back purchases sharply; many private refiners stopped importing Russian oil altogether. Greek vessels, which used to carry much of Russia's flagship "Urals" grade to India, shunned the trade. Russian firms have begun selling more barrels to unsanctioned third parties—such as Tatneft, a smaller oil firm—which then resell the oil onward.
Before the war, over $300bn of bonds and cash belonging to Russia sat in various parts of the global banking system. Soon after the full-scale invasion of Ukraine in 2022, most rich countries froze these assets as part of sanctions. Around €200bn of the frozen cash is held in Europe. European authorities have, in effect, expropriated the interest generated by the frozen funds—around €7bn a year—without touching the principal. G7 countries repackaged this interest into a roughly €45bn bond, the proceeds of which flow to Ukraine. As of 2025, a broader "reparation loan" scheme was under discussion in EU circles that would tap not just the interest but the €200bn of principal, structured so that Ukraine would only have to repay the money if Russia in turn pays reparations. The European Central Bank worries that outright confiscation of assets belonging to a foreign government would hobble trust in the euro. Dmitry Medvedev, a former president, railed at the "Euro-degenerates" seeking to hold onto Russia's cash.
Some 300,000 people have fled Moscow since the start of the war. On June 29th 2025 the Kremlin published a new order classifying information about any preparations for the mobilisation of society or government institutions as a state secret, and prohibiting the sharing of data from vast areas of civilian-state interaction, including trade, economics and science. Contact with the West is perilous; prison sentences of up to eight years chill debate.
Rosatom, Russia's state-owned nuclear firm, has about 65% of the global export market for nuclear reactors and controls 44% of the world's uranium-enrichment capacity. In 2023 Russia earned about $2.7bn from exporting enriched uranium—mostly to America and the EU—and another $1.1bn from exporting reactors and components. Rosatom reported that its foreign operations generated revenue of more than $16bn in 2023, including more than $7bn from building new power plants, many funded by Russian state-backed loans. That figure has risen since the invasion of Ukraine, from almost $9bn in 2021.
Rosatom's success rests partly on an attractive all-in-one package: fuel, training for local engineers and strong state backing that allows it to absorb the financial and hard-to-insure risks of nuclear projects. Clients can be bound into relationships lasting up to 80 years from construction to decommissioning, covering maintenance, spare parts, training and technical assistance. Russia reportedly lent around 90% of the estimated $12.6bn cost of building Bangladesh's first nuclear reactors and awarded Hungary two reactor contracts in 2014 without a tender.
In May 2025 the European Commission pledged to introduce taxes or levies on Russian enriched uranium, aiming to phase it out gradually. It soon relented after lobbying from Slovakia and Hungary, which both have Russian-designed reactors and complained it would lead to higher prices. Last year the EU's reliance on Russian enriched uranium fell sharply to 24% of its needs, from 38% the year before. In 2023 America bought roughly a quarter of its enriched uranium from Russia. Last year Russia restricted exports to America in response to American import curbs.
See also: nuclear power.
Ukraine's concerted drone campaign against Russian oil refineries, which began in August 2025, has hit 16 of Russia's 38 refineries, according to Argus Media. Some have been struck up to three times; repeated attacks cause lasting damage, especially to the cracking units that break down crude oil into petrol, diesel and aviation fuel—these are extremely costly and the sanctions regime makes them extremely hard to replace. The Ryazan refinery, one of Russia's biggest at 340,000 barrels a day, is 200km from Moscow and has been among those hit. In mid-September Ukraine struck Primorsk, Russia's largest oil-loading port on the Baltic Sea.
Ukraine's drone strikes have grown smarter. Instead of sporadic attacks, Ukraine now bombs the same refineries every two to three weeks, and instead of attacking at the point where crude enters, it targets secondary refinery units that produce the final fuel—these are trickier to fix because they require sophisticated components from the West. Ukraine is also increasingly blowing up fuel depots and loading terminals. Analysts estimate the campaign could cut Russia's refinery throughput by 7-10%, forcing Russia to export more crude into an already saturated market.
Seasonally adjusted, Russian diesel exports fell to their lowest since 2017. Long queues of a kilometre and more appeared at filling stations from Vladivostok in the far east to Volga near Moscow. Some authorities introduced rationing; Russian-occupied Crimea limited motorists to 30 litres of fuel. Domestic fuel prices hit record highs. On September 25th deputy prime minister Alexander Novak announced a partial ban on diesel exports and extended an earlier ban on petrol exports to the end of the year. Crude exports have actually increased as less oil is refined domestically, but crude is a much lower-margin business than selling refined products.
Russia produces a fifth of all the fertiliser in the world. Russia is also the world's largest wheat exporter and has enjoyed a run of excellent crops owing to benign weather.
Russia's oil and gas exports, which account for about a third of federal revenue, are increasingly shipped via the Baltic Sea using a "shadow fleet" of tankers designed to dodge Western sanctions. China buys 47% of Russia's oil exports and India 38%. First assembled by Iran in the 2010s, the loose fleet that exclusively ships oil under Western embargo more than doubled in size since mid-2022. It now numbers nearly 700 mostly older vessels, controlled through shell companies that mask their beneficial owner (rising to as many as 1,500 if you count those that occasionally run shifty crude). In December 2025 they carried nearly 5m embargoed barrels per day, equivalent to 11% of global seaborne flows, according to Kpler, a data firm. One in five of the world's internationally trading tankers is "dark", according to Windward, a maritime-intelligence firm.
The number of shadow vessels worldwide—ships that conceal themselves or their identities—has soared from about 200 in 2022 to roughly 1,000 today. Shadow vessels now make up 19% of the global oil-tanker fleet, according to S&P Global. Much of that growth comes from a pool of nearly 200 "flexible" ships servicing more than one sanctioned country. North Korea pioneered the tactic of "going dark" by turning off automatic identifier signals and transferring shipments between vessels at sea; Iran and Venezuela adopted similar methods before Russia's fleet "went on steroids" after 2022.
Western countries are now blacklisting ships en masse. Altogether 623 vessels were added to a sanctions list for the first time in 2025, compared with 225 in 2024. About 40% of the ships that ferried Russian oil in 2025 are blacklisted by at least one government. In October 2025 America imposed secondary penalties on Russia's two largest oil firms; combined with older measures, tankers carrying 80% of the barrels Russia pumps are exposed to potential sanctions. In January 2026 the EU banned all imports of products made from Russian oil, stopping flows into the bloc of products from Turkey, India and China that had been refined from Russian crude. Its next sanctions package, due in February, may bar the EU's insurers from serving tankers carrying Russian oil.
Sanctioned vessels increasingly exploit flag-hopping: in 2025 the average time for a sanctioned vessel to acquire a new flag fell to 45 days, down from 120 days in 2023. Some vessels cycle through five separate registries in a month, including registries that do not legally exist. Nearly 700 ships changed flags between two and six times in 2025. Many shadow tankers turned to fraudsters offering fake flag certificates; the impersonated maritime authorities, such as Guyana's and St Maarten's, often do not have vessel registries open to foreigners, making such falsely flagged ships legally stateless. Since December 2025 America has used statelessness as justification for seizing at least seven tankers. Britain has found a similar legal basis to detain shadow vessels, a dozen of which sail through the strait of Dover every day. On January 10th 2026 Germany blocked a tanker from entering its Baltic waters—an EU first. In January 2026 the French navy intercepted the Grinch, a sanctioned tanker flying a false Comorian flag and carrying 730,000 barrels of Russian oil, and rerouted her to a port near Marseille.
The shadow fleet is not solely a tool of state power: much of it is run by networks of opportunists exploiting weak maritime governance for profit, through shell companies in opaque jurisdictions. Still, the Kremlin treats it as a critical national interest. In early 2025, when Estonia's navy tried to detain the Jaguar, a sanctioned tanker sailing without a flag, Russia launched fighter jets into Estonian airspace to protect the ship, forcing the Estonians to break off pursuit.
Over Christmas 2024 a shadow tanker, the Eagle S, was caught cutting undersea cables in the Gulf of Finland. Finnish prosecutors have struggled to prove it was not accidental or to link the ship—owned by a company registered in the United Arab Emirates and sailing under a Cook Islands flag—to Russia. One tanker, the Kiwala, encapsulates the fleet's slipperiness: detained by Estonia in April 2025, it was released after Djibouti admitted it to its registry; re-intercepted by France in September under the name Boracay, it had used five names, seven flags and four registered owners since entering the dark fleet in 2022.
Since late November 2025 Ukraine has attacked at least nine tankers, seven of them shadow-fleet vessels, using mines as well as naval and aerial drones. Some strikes occurred far from its shores, including one in the Mediterranean. War-risk insurance premiums in the Russian Black Sea jumped to 1% of the value of a tanker's hull and machinery, up from 0.4% a year ago. The cost of ferrying barrels from the Black Sea to India or China has surged, helping depress the price of Urals crude, Russia's main grade, to $27 below Brent, the international benchmark—the biggest discount since April 2023. Russia's oil-and-gas revenues could soon fall below $10bn a month. To safeguard its route to market, Russia is bringing more of the shadow fleet under its direct control: since mid-December 2025, 32 tankers under sanctions have appeared on its maritime registry. Russian-flagged vessels would be all but uninsurable, but the Kremlin may dispatch submarines and fighter jets to protect some ships.
Russia's full-scale invasion of Ukraine has eroded its influence over the south Caucasus—Azerbaijan, Armenia and Georgia—which it still considers its sphere of influence. In 2020 Russia brokered a ceasefire in the war between Azerbaijan and Armenia over Nagorno-Karabakh that allowed it to deploy troops in Azerbaijan as peacekeepers. But in 2023, with Russia distracted by its war in Ukraine, Azerbaijan recaptured all of Nagorno-Karabakh in less than 24 hours while Russian peacekeepers stood by, and Russia was compelled to withdraw them. Azerbaijan now seeks to deal with Moscow as an equal rather than a subordinate.
Russia has intensified plans to build sanctions-proof transport links through the region, such as a rail line to Iran. It has also been trying to oust Nikol Pashinyan, Armenia's pro-Western prime minister, hoping to repeat the Georgian scenario in which a Moscow-friendly oligarch halted the country's westward trajectory. On August 8th 2025 Donald Trump brokered a peace deal between Armenia and Azerbaijan that gives America a 99-year transport corridor across Armenian territory, diminishing Russia's leverage. Russia stated the deal was "positive" but warned America not to repeat the "counterproductive outcomes" of its interventions in the Middle East.
Russia is a crucial regional partner for the five former Soviet states of Central Asia—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan—in geopolitics, the economy and security. Russia is rivalled only by China as Central Asia's main trading partner. Kazakhstan, Kyrgyzstan and Tajikistan all have security pacts with the Kremlin, while Kyrgyzstan and Tajikistan host Russian military bases. Central Asian states have neither endorsed nor condemned Russia's invasion of Ukraine, sitting on the diplomatic fence.
Russia operates the Africa Corps, a successor to the Wagner Group, which exploits Africa's natural resources. The corps works alongside Russia's broader strategy of deepening ties with rogue states including Iran and North Korea.
Russia invests heavily in international state media. RT, its state-controlled news network, has contracts with more than 30 African television stations and opened the RT Academy in 2024 to train journalists in Africa, South-East Asia and China. Sputnik launched an Africa service. In Latin America RT and Sputnik share producers, camera crew and office space with Venezuela's Telesur and Iran's HispanTV. African Initiative, a press agency in Bamako, Mali, was revealed to be run by Russian intelligence. Russia increasingly practises "narrative laundering"—co-opting local outlets and influencers rather than distributing content under its own brand.
Military spending grew by 53% in real terms in 2024, according to the Stockholm International Peace Research Institute. Growth was expected to slow sharply to 3.4% in 2025. Official figures put defence spending at 6.7% of GDP in 2024, with spending forecast to rise further. Declared defence spending was projected to hit $160bn in 2025. State-run banks have also engaged in an immense off-budget lending spree to support the military-industrial complex. This figure includes payments to injured soldiers, families of the killed, and large salaries to entice contract soldiers.
Russia's defence-industrial base has expanded dramatically since the invasion of Ukraine. Its factories produce an estimated 1,500 tanks per year (compared with America's 135), 3,000 armoured vehicles (America makes no new infantry fighting vehicles), and 250,000 artillery shells per month—on track to build a stockpile three times greater than that of America and Europe combined. It also produces more than 1,400 Iskander ballistic missiles and some 500 Kh-101 cruise missiles per year. Russia's arsenal includes the Oreshnik, a nuclear-capable hypersonic missile; on January 8th 2026 it struck Lviv, a Ukrainian city close to the Polish border.
Only 10-15% of tanks and armoured vehicles are newly built; the rest are refurbished from old Soviet stockpiles, which could run dry by 2026 at present loss rates. Key inputs to the artillery supply chain—chromite for barrels and cotton cellulose for propellant—still have to be imported. North Korea has provided a significant proportion of the artillery ammunition used in Ukraine.
Major facilities include Uralvagonzavod (the largest tank plant), Omsktransmash (which upgrades old T-80 tanks around the clock), Volgograd Titan-Barrikady (Iskander launch systems), the Alabuga Special Economic Zone in Tatarstan (Iranian-designed Shahed-136 suicide drones), the Sverdlov plant in Dzerzhinsk (the largest explosives plant) and Yekaterinburg Factory No.9 (howitzer and tank barrels). Alabuga has been under Western sanctions since 2024. AO IEMZ Kupol, part of a state-owned arms company, developed and flight-tested the Garpiya-3 drone—a knock-off of the Shahed—in China with the help of Chinese firms; America sanctioned two Chinese companies involved in October 2024. The newest Shahed drones are filled with Chinese components; China became the leading supplier of industrial equipment to Russia in 2023-24, accounting for 80-90% of imported machine tools. The Jamestown Foundation estimates that around 90% of Russian machine-tool imports are now from China. Russia depends heavily on China for nitrocellulose, the cotton-derived propellant for artillery shells, tank rounds and missiles. Turkey, through intermediaries, formerly supplied about half of Russia's nitrocellulose imports until those firms were sanctioned; China's Norinco Group, a state-owned armaments firm, is now ramping up sales of nitrocellulose to Russia via subsidiaries. China is also stepping up exports of cotton pulp and cotton cellulose used to make nitrocellulose; nearly all of Russia's cotton pulp previously came from Uzbekistan and Kazakhstan.
Alabuga has recruited hundreds of young African women, some younger than 18, through a scheme called "Alabuga Start" advertised as a work-study programme for catering and hospitality. In reality most recruits end up manufacturing drones. The UN says the deceptive recruitment could constitute human trafficking. Timur Shagivaleev, the boss of Alabuga, has reportedly said that African men are "too aggressive and dangerous" to be pliant workers, explaining the preference for young women aged 18 to 22. Some African governments have signed formal agreements with Alabuga; African diplomats have toured the factory. Only Burkina Faso has seriously tried to halt recruitment. Ukrainian drones have repeatedly struck the facility; several African women were wounded when their dormitory was hit in 2024.
Russia's drone production has scaled dramatically. In 2024 Russia was producing around 300 Shahed drones a month; by mid-2025 that many were rolling out in under three days. Ukrainian military intelligence obtained documents suggesting Russia plans to increase production to 500 drones a day. The Shaheds, now in their sixth modification since Iran first shipped them in 2023, use machine-learning and piggy-back on Ukraine's internet and mobile networks, making them resistant to electronic jamming. North Korean ballistic missiles have also become central to Russia's air campaign.
Since the full-scale invasion of Ukraine in February 2022, Russia's intelligence services have led a campaign of sabotage and subversion across Europe, described variously as "hybrid warfare" or "grey zone" tactics. Research by the International Institute for Strategic Studies found that incidents of confirmed Russian sabotage against European infrastructure more than tripled between 2023 and 2024. Tactics include drone surveillance of critical infrastructure, cyber-attacks, airspace violations and the planting of explosive parcels on cargo planes.
Norwegian intelligence discovered that Russian hackers had taken control of a local dam, causing water to flow unnoticed for hours. In September 2025 drones flew neat, parallel paths over power plants, refineries, hospitals, government headquarters and an arms factory owned by Thyssenkrupp in Schleswig-Holstein, Germany's northernmost state, as well as over airports in Copenhagen and Oslo, Danish oilfields in the North Sea, and Danish and Swedish military bases. Airspace violations have approximately doubled in the past year, growing more serious: three Russian MiG-31 jets spent 12 minutes in Estonian airspace in the most egregious breach in over 20 years; Russian decoy drones were shot down deep inside Poland; and Norway reported three airspace violations in 2025 alone.
In 2022 a Russian fighter pilot, having received an ambiguous message from ground control, fired two missiles at a British spy plane in the Black Sea; one missed and the other malfunctioned. Russian officials were chastened by the near-calamity.
Russia's grey-zone tactics appear aimed specifically at countries most helpful to Ukraine: Denmark, which will be the first NATO country to host Ukrainian weapons production, and Poland, whose Rzeszow airport is the main hub for the transfer of military aid to Ukraine. Boris Bondarev, a former Russian diplomat who resigned to protest against the invasion, says the aim is partly to distract NATO countries from supporting Ukraine by forcing them to focus on their own rearmament. See also: China.
The KGB was founded in 1954 and served as both a spy service and a secret police force, a dual identity that profoundly shaped its espionage work. The agency ran an "illegals" programme, placing intelligence officers abroad under false names and false nationalities. Unlike officers who pose as diplomats using their real names, illegals had to speak, act and even think like a native of their cover nationality. The KGB's Directorate S ran what has been called the most intense training regimen for any espionage programme in history, with cover stories built up over years. Russia's illegals programme remains active today; the spies acquired mythical status, feted publicly by Vladimir Putin.
Vasily Mitrokhin, a KGB archivist, was tasked with moving the archives of the First Chief Directorate (the KGB's foreign-intelligence arm) to a new headquarters. He painstakingly studied the files and took copious notes in cryptic shorthand. Using concentrated fruit juice to type up his notes (he knew the KGB monitored purchases of typewriter ink ribbons), he hid them in milk churns under his dacha. Mitrokhin first offered his secrets to the CIA, which turned him down. He defected to MI6, Britain's foreign-intelligence service, in 1992. His files exposed huge numbers of KGB operations and illegals around the world: 3,500 counter-intelligence reports were issued to 36 countries, with about 1,000 people identified as Soviet agents. America later had to pay $1m towards his resettlement in exchange for access to the files.
After the invasion of Ukraine in 2022, the Kremlin banned Facebook and Instagram; their parent company, Meta, was labelled an extremist organisation. WhatsApp was initially spared, partly because its focus on private chats rather than public sharing distinguished it, but perhaps mainly because it had more than 100m Russian users. By early 2026, however, both YouTube and WhatsApp had been completely blocked. Telegram, one of the main sources of information not controlled by the state, was being throttled—prompting complaints even from members of the Duma. Top10VPN, a VPN-review service, counted 58 regional or national suspensions of the internet in 2025, with an average duration of 25 days. Internet service providers allow only a useless sliver of data from many Western websites to load.
In 2025 Putin gave control of Russia's internet to the notorious Second Service of the FSB—the division that poisoned Alexei Navalny.
In June 2025 Putin signed a decree ordering the creation of a state-endorsed super-app combining messaging with e-government services, to be pre-installed on new devices. The project was assigned to VK, a state-linked social-media group, which had already released a platform called MAX integrating messaging, payment software and mini-apps for shopping and deliveries. The concept stems from China's WeChat, which some 1.3bn people use for everything from messaging to making medical appointments and paying bills—and which doubles as an instrument of censorship and surveillance. More than 36% of Russians already use virtual private networks (VPNs) to access blocked content. By early 2026 the Kremlin was also experimenting with mobile-internet blackouts that force people to use state-controlled messenger services which double as tools of surveillance.
On March 6th 2026 the FSB began blocking mobile internet services in Moscow, plunging the capital into a digital black hole for almost three weeks before the blocking was partly reversed. St Petersburg suffered similar disruption. Parents could no longer message their children, drivers could not pay for parking, and even taxis had to be ordered by phone. Each day cost Russian businesses as much as 1bn roubles ($12m), according to Kommersant. Sales of two-way radios, pagers and paper maps soared. Putin, who famously does not use the internet, sanctioned the blocking of Telegram, which has a monthly reach of 94m people in Russia. The ban—nominally due on April 1st—started ahead of schedule. Pavel Durov, Telegram's founder, a Russian tech entrepreneur based in Dubai, was being investigated for "terrorist activity" after long refusing to grant access to the Russian security services. Durov said the coercion was meant to push users towards Max, the national messenger app with an inbuilt surveillance function. Dmitry Peskov, Putin's press secretary, complained the blocking made propaganda work harder: "We are fast losing the instruments of our propaganda work abroad." Vyacheslav Gladkov, governor of Belgorod province, protested that the absence of information was "an even bigger threat" than Ukrainian armed forces. Pro-war military bloggers, who earn as much as 1.5m roubles a month from ads on Telegram, were enraged; one prominent pro-Kremlin blogger, Ilya Remeslo, accused Putin of usurping power and called for his resignation—and was promptly checked into a psychiatric hospital. Gregory Asmolov of King's College London says the Kremlin has long wanted to disconnect Russia from the global internet; the war in Ukraine "served as a catalyst" for transforming Russia "from an open, globally integrated system into a closed and controllable one." In a Levada Centre poll conducted with Novaya Gazeta, three-quarters of respondents chose "tiredness of war" to describe the national mood.
Theatre has played an outsized role in Russian history. Alexander Herzen, a 19th-century liberal thinker, said the theatre served instead of a parliament. The Bolsheviks nationalised the theatres in the 1920s and in the 1930s declared all plays must conform to "socialist realism". Director Vsevolod Meyerhold was tortured and killed. During Stalin's last years, "rootless cosmopolitans"—a codeword for Jews—were charged in Pravda with "an attempt to poison Soviet consciousness". Theatre critics were among those purged.
Since the full-scale invasion of Ukraine in 2022, cultural repression has intensified. In 2024 director Yevgenia Berkovich and playwright Svetlana Petriychuk were convicted of "propaganda and the justification of terrorism" for their play "Finist, the Bright Falcon", which told the story of Russian women recruited by Islamic State—the first artists jailed for the content of their work since Soviet times. The prosecution relied on a pseudo-discipline called "destructology", invented by Roman Silantyev, a member of the World Russian People's Council, which had hailed Putin's invasion of Ukraine as a "holy war". The ministry of justice declared that destructology "does not draw on any scientific or practical data and therefore cannot be verified".
The Republic of Sakha, commonly known as Yakutia, is bigger than Argentina but has a population of just 1m, half of them Yakuts, a Turkic people. Temperatures drop to -60°C in winter and soar to 40°C in summer. The region produces a quarter of the world's diamonds, mined by Alrosa, a diamond-mining company that has closed mines and cut charitable donations since Western sanctions hit. According to Mediazona, an independent Russian news site, Yakutia has lost over 2,500 dead in the war in Ukraine—more than St Petersburg, Russia's second city, which has five times as many people.
In the 2010s Yakutia was one of the most dynamic parts of Russia. It boasted a booming film industry (dubbed "Sakhawood") that won recognition at festivals in Berlin and Seoul. Its IT firms included InDrive, a taxi app that lets passengers and drivers haggle, which became popular in Africa, Asia and Latin America; and Mytona, a game developer that won a prize at the International Mobile Gaming Awards in 2019. After the invasion of Ukraine, InDrive's owner moved his staff abroad and Mytona went to New Zealand. In 2019 Alexander Gabyshev, a shaman-warrior from Yakutia, set off for Moscow on foot to exorcise the dark forces of Vladimir Putin with a ritual in Red Square; he has been incarcerated in a psychiatric facility for five years.
Vladimir Putin has put the whole of Russian society onto a war footing. The arms industry creates employment. Generous payments to soldiers and their families amount to 1.5% of GDP. Russia's navy and air force are largely intact. NATO's top commander says Putin is restocking men, arms and munitions at an "unprecedented" pace. Russia's casualties have passed the 1m mark. Russia has suffered more than 1m dead and wounded in Ukraine, at a rate of about 1,000-1,200 soldiers killed or injured every day. The ratio of severely wounded to killed is thought to be about four to one, reflecting the severity of injuries and the low priority Russia gives to medical evacuation. Russia's losses to date are on a par with the entirety of Britain's losses in the second world war (264,000 killed) and approaching America's battlefield losses (292,000 killed) in the same conflict, when its population was similar in size to Russia's today. They are more than four times the 47,000 combat losses America suffered in eight years of direct involvement in the Vietnam war, and they dwarf the roughly 68,000 casualties (killed and wounded) the Soviet Union suffered in Afghanistan. Russia has also lost nearly 11,000 tanks and almost 23,000 armoured infantry vehicles.
Russia aims to expand its armed forces to 1.5m active troops, up from about 1.3m in September 2024. In 2023 it announced the creation of a new formation, the 44th Army Corps, in Karelia along the Finnish border; its first units were blooded in Ukraine. Russia is also expanding several brigades into larger divisions. If successful, these reforms would increase troops, equipment and weapons on Russia's western front by 30-50%.
Though under pressure in Ukraine, Russia has deployed seven new submarines in the Pacific since 2022—more than all the submarines America built over the same period. China and Russia appear also to have conducted their first-ever joint submarine patrol. Russian and Chinese warships, coastguard vessels and even nuclear-capable bombers regularly operate near the seas and airspace close to Alaska. In August 2025 Donald Trump welcomed Vladimir Putin in Anchorage; as both sides dangled the promise of lucrative joint Arctic projects, Russian and Chinese warships were conducting a joint naval patrol near the Aleutian Islands.
The Russian Orthodox Church has proclaimed the invasion of Ukraine a holy war and sent thousands of priests to the front, both to rally the troops and, in some cases, to fight. At least 300 priests have signed contracts with the Ministry of Defence, receiving the same privileges as veterans. Patriarch Kirill has promised from the start of the war that sacrificing one's life in it will wash away all sin, even for the unrepentant. Alexei Uminsky, a parish priest, was defrocked for praying for peace instead of victory and left Russia; he told the media that "the patriarch has removed responsibility for killing in the war." An anti-war protester who displayed a sign reading "Thou shall not kill" was detained and fined for "discrediting the Russian army".
Putin suspended official government population surveys in 2024 until 2029—a sure indicator of grim news about demographics. Alexei Raksha, a demographer who raised the alarm about the blackout, was declared a "foreign agent". The death of many Russian men in Ukraine and the flight of many others abroad to escape military service has exacerbated the decades-long shrinkage of the workforce. To alleviate the labour shortage, Russia is importing labour from Cuba, India, North Korea and Sri Lanka; it issued 240,000 work permits to foreigners in 2025.
The war is likely accelerating the decline in Russia's birth rate. In 2023, before the data halt, the fertility rate fell to 1.3—the lowest since 2006. According to a survey by Russia's Higher School of Economics, nearly a third of Russians decided to postpone or completely abandon plans to have a baby because of the war and the worsening economic situation. In response, the Duma in 2024 banned the promotion of childlessness. Several regions are restricting abortions in private clinics. School-sponsored public forums on VK are being flooded with natalist slogans. Priests have been enjoined, along with bureaucrats, to denounce abortion and promote pregnancy.
People who join the army are routinely cleared of past crimes, no matter how depraved. Verstka, an online media outlet, counted 1,112 court cases, including prosecutions for murder and rape, that have been suspended or dropped because the accused signed military contracts. Putin has granted soldiers immunity from prosecution while in service for relatively serious crimes, including theft and battery. Over the past four years around 1,000 people have been killed or injured by returned war participants, according to Verstka; half of the murders were committed by ex-convicts recruited to the army from prisons.
Defence systems intended to foil Ukrainian drone attacks confuse satnav devices in Moscow and other cities—a "spoofing" effect that can make GPS think it is 50km from its actual location. Fears of drones and other military concerns prompted more than 500 airport closures in 2025. Sanctions prevent the import of spare parts for Airbus and Boeing aircraft, which account for 90% of passenger flights; there were 800 breakdowns in 2025, more than triple the tally of the year before. Some airlines are refurbishing old Russian-made jets. Many lifts in apartment blocks, also made abroad, cannot be properly repaired because spare parts are unavailable.
Russia sustains recruitment through what Aleksandr Golts of the Stockholm Centre for Eastern European Studies calls "market mobilisation" and others have dubbed "deathonomics". Putin believes the Afghan war was one of the main reasons the Soviet Union collapsed; his system is designed to avoid full mobilisation by offering life-changing sums to volunteers, the majority from poorer provincial towns and in their 30s and 40s. By late 2024 the signing-on bonus had reached 1.19m roubles ($15,000), rising to 2.5m roubles in some regions as they competed to please Putin by providing recruits. Average annual pay for a contract soldier was 3.5m-5.2m roubles—up to five times the average salary. Monthly wages of 200,000 roubles were five times what many recruits had previously earned. If a contract soldier is killed, his family receives 11m-19m roubles. According to an October 2024 survey by the Levada Centre, 40% of Russians would approve of a family member or close friend signing up. Some 88% approve of contract soldiers receiving money and benefits for going to war "instead of us". The impact is visible in small towns across Russia: new houses, smarter cars, nail bars and gyms.
Yet the calculus is looking less appealing: many soldiers say they signed a contract for a year without realising that Putin had approved a decree giving the army authority to extend contracts until the end of the war. High inflation and hefty bribes to officers to avoid the most hazardous operations erode their income. The army's bill for manpower went from 3trn roubles in 2024 to more than 4trn in 2025—around 2% of GDP; nearly 40% of that is payments for deaths in service. Russian casualties, thought to be some 1,000 men a day, may exceed the army's intake.
Russia recruits some 30,000 men a month but faces longer-term challenges from a declining and ageing population. The 2025 recruitment drive was on course to meet its target of 403,000 soldiers, only slightly down from 420,000 in 2024. A source in Ukrainian military intelligence suggested that Russia had the resources to pin Ukraine back throughout 2026 using only voluntary recruitment; recruitment numbers were running at roughly twice the level of losses. Since late 2024, military hospitals have been operating at maximum capacity. NATO's Supreme Allied Commander Europe estimated in April 2025 that Russia had suffered roughly 790,000 casualties. Public funeral notices suggest that between 2022 and 2024 Russia lost about as many lieutenants as would normally be needed to staff ten divisions or brigades.
Russia's recruitment drive has created a vast battlefield economy in which everything has a price: drones, medals, home leave and life itself. Officers see their soldiers not just as grunts but as a source of enrichment—corruption and slave labour have long been features of the Russian and Soviet armies. Russia's army provides gear to elite airborne and special-forces units, but infantry must buy their own equipment; since 2023 Wildberries and Ozon, the main Russian online retailers, have been available in the occupied regions of Donetsk, Luhansk, Zaporizhia and Kherson. Soldiers report paying 1m roubles to be transferred away from the front line, plus 100,000-150,000 roubles a month thereafter. Some commanders requisition troops' bank cards and PIN codes before sending them into an assault; the dead are declared missing, and commanders withdraw their money at ATMs in Donetsk and Luhansk. Soldiers who refuse to pay may be thrown into dug-out pits for torture. "Refuseniks" can be "zeroed out"—killed by their own side—by shooting, being tied to trees to freeze, denial of medical care, or having drone operators target them on the battlefield. Verstka, an independent Russian news site, confirmed the identities of at least 100 commanders who either ordered or carried out such killings.
Russia has turned to Africa for manpower, enlisting thousands of Africans to fight in Ukraine. Ukraine puts the number of African nationals currently enrolled in the Russian army at 1,780 from 36 countries. Many were recruited under false pretences by agencies promising civilian jobs; on arriving in Russia they were presented with the choice of signing a military contract or paying large sums to leave. By one estimate, as many as 42% of foreign fighters are killed within four months of joining. Russia has drawn up a list of 36 "friendly" countries, including African ones, where recruiters are barred from seeking fighters—suggesting it worries that the deaths of Africans may cost it African support. A survey by Afrobarometer, a pollster, finds that positive views of Russia in Africa trail those of America and China. See also: Kenya, Ghana.
Western intelligence agencies disagree on how long Russia would need to reconstitute its army: America says "during the next decade"; Norway five to ten years "at the earliest"; Ukraine five to seven years; Germany five to eight years; Estonia three to five years. A study by the RAND Corporation found that Russia has abandoned its pre-war model of a leaner, professional force in favour of an older approach centred on mass and firepower.
A pipe gives a wise man time to think and a fool something to stick in his mouth.